The project will bring 300 residences, 7,000 square feet of restaurant space on the ground floor, a rooftop lounge and coworking spaces for residents.
The complex adds to the nearly 6,000 apartment units already under construction in the downtown, Midtown, Montrose, Heights/Washington Avenue submarkets, according to ApartmentData.com. Those close-in submarkets account for more than a quarter of the 23,000 apartment units being built across the Houston area.
The project, part of Chicago-based Origin Investments’ Opportunity Zone Fund, is among the first multifamily projects to break ground in a Qualified Opportunity Zone in the downtown area. The biggest such project, The Preston Tower, a 373-unit, 46-story apartment building being developed by Hines in partnership with Cresset-Diversified QOZ Fund, broke ground at Preston and Milam earlier this year.
Opportunity zones, created by the federal government in 2017, allow investors to avoid or minimize capital gains taxes on certain real estate investments.
David Scherer, a cofounder of Origin Investments, said in statement that the project “meets our stringent criteria as a sound investment opportunity; it also happens to be in an Opportunity Zone which will provide further benefits to investors down the road.”
The location, about half a mile east of downtown on 1.9 acres at Navigation Boulevard and McAlpine Street, is close to the MetroRail’s Purple and Green lines and the Buffalo Bayou Hike and Bike trails as well as restaurants and bars.
Developments in the area represent the next progression from downtown, which transformed from a daytime environment for office workers to one filled with restaurants and entertainment after hours, thanks to the addition of about 3,700 residential units over the last five years.
Investors are looking east of Interstate 45, across from the George R. Brown Convention Center and Minute Maid Park, and are now pushing farther east across the railroad tracks, too. Projects include new developments as well as older warehouses being converted to different types of uses.
“It’s booming,” said Matt Deal, a principal at Houston-based property valuation firm Deal Sikes. “The younger population, it’s where people want to be.”
Land prices for close-in development sites are up as much as 50 percent over the last five or six years, according to Deal Sikes. Parcels in the East End selling for upward of $80 per square foot.
“With its location, residents will have spectacular views of Houston’s full skyline, and they will be able to walk, bike and/or easily commute to employment and entertainment options that are nearby,” Annamarie Bjorklund, an Origin Investments acquisition associate, said. “Yet at the same time, the rents at the newly developed 2404 Navigation will be a cost-competitive alternative, without sacrificing amenities.”
The mix consists of including 60 junior one-bedroom units starting at 548 square feet, 200 one-bedroom units starting at 713 square feet and 38 two-bedroom units starting at 1,230 square feet, and two three-bedrooms units at 1,568 square feet. Units will have private patios, side by side washers and dryers, slate appliances, chef-grade stoves and built-in workstations.
Marquette Cos., a real estate investment and property management firm based in Naperville, Ill., has several projects in various stages of the development and lease-up pipeline in Houston. It opened Catalyst Houston, a 28-story apartment tower near Minute Maid Park, in 2017.
“Navigation is a romantic boulevard that will be an incredible amenity for the residents with great restaurants, festivals and farmers markets,” said Darren Sloniger, president of Marquette Cos. “This is a truly unique community, with great history, walkability and culture.”